The stock market extended its rally during the second quarter as tariff fears eased and the U.S. Federal Reserve (“Fed”) signaled a willingness to cut interest rates. For the quarter, the S&P 500 Total Return Index (“Index”) returned 4.3%. Year-to-date through June 30, 2019, the Index returned 18.5%.
Second quarter investment returns were led by the Financials and Technology sectors. Talbot Financial client portfolios were overweight both industry sectors relative to our benchmark Index. In the Financial sector, we particularly favor the strength of certain banks’ balance sheets and the material amount of capital these banks are returning to shareholders through dividends and share repurchases. In the Technology sector, our view remains that we are in the early innings of long-term secular technology advancement propelled by cloud-based computing.